Audio content distribution is a highly competitive market. There are local radio stations broadcasting their content, nationally syndicated broadcast networks broadcasting content of national interest and satellite radio services that are broadcasting content that is mass distributed to listeners region and nationwide. Content is geared to the market that it can be received in—local content is generally of interest to a small locale where national content is generally of interest to a much wider area. Much of the content is listener supported through advertising. Without advertising, even the pay content channels would be prohibitively expensive (for typical programming).
The problem with advertising is that it should be universally applicable to all listeners for a national distribution model. It would be cost-prohibitive for “Bob's Car Wash” to advertise on a nationally syndicated program if the business was located in Abilene, Tex. Nationally syndicated programs broadcast by a local terrestrial broadcast transmitter solve this problem by inserting local advertisements into the audio stream. This allows local advertisers to achieve the advertising they desire in highly coveted time slots on local stations without paying for advertising on a national level. Further, for the broadcaster, both the syndicated programmer and the local “transmitter owner”, it allows for a wider range of advertisers. After all, it may not be that easy to find advertisers who desire, or can afford, advertising on a national basis.
Even terrestrial broadcasters find the need for location based content. Many FM radio stations and some AM broadcast stations find themselves broadcasting to ever widening audiences. An example of this problem can be found in any major metro area where these stations attempt to grab a significant portion of the radio listeners in the area. Further, these “superstations” have positioned their transmitting antennas to have the widest possible coverage. In many cases, these superstations have created larger broadcast areas by purchasing multiple stations and “simulcasting” local content among two or more broadcast transmitters, with each broadcasting exactly the same content. Certainly this has its advantages, but it limits advertisers to businesses with huge marketing budgets, typically with multiple locations. Smaller local advertisers are almost locked out of the radio market for all but medium-powered AM broadcast stations.